How the CARES Act Helps Independent Contractors

When the Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed, it provided multiple options of relief for travel agencies and travel advisors, including independent contractors (ICs) and the self-employed. The American Society of Travel Advisors (ASTA) hosted a webinar earlier this week to break down the options, among these: the Paycheck Protection Program via the Small Business Administration (SBA); the Emergency Stabilization Fund, which allocates $29 billion for airlines, aircraft repair stations and “ticket agents;” and the Economic Injury Disaster Loans via the SBA, intended to help businesses suffering “substantial economic injury” as a result of COVID-19.

According to Peter Lobasso, senior vice president and general counsel, ASTA, says the unemployment compensation is among the most relevant sections of the CARES Act. Good to know: While 1099s usually are unable to claim unemployment because they and their employers have not paid into the program, they will be allowed to file with their state’s unemployment program under the CARES Act. Through December 31, 2020, ICs and self-employed advisors who meet the criteria can apply.

ICs and the self-employed must certify they were adversely affected by COVID-19, which includes diagnosis, quarantine or the inability to reach work; however, Lobasso expects this to be very loosely interpreted. And, very clearly, the travel industry has been hit hard by the virus. The benefit amount will be determined based on each state’s calculation using income for the prior tax year plus $600 for up to four months. The good news is even If this number is larger than what you earned, you will be entitled to the full amount.

It’s important to note when filing the claim that you correctly state your status as a non-employee—be very careful as applications may not be clear, Lobasso warns. If you have questions, Lobasso urges you to reach out to the proper state agency for assistance. Inaccurate information will result in a delayed or denied claim. It can also, if you list yourself as a W-2, a “real headache” for your affiliated agency and may even result in an audit.

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